Trust me – Yeah right!
By Brent Strong
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Posted April 2010
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Trusts are always a topical subject and never far from the spotlight. Whether it's anti-tax avoidance or asset protection, there can be little argument that the standard of administration of trusts (including estates) in New Zealand has room for improvement. Expert Deane Purdue suggests one explanation might be the lack of accountability of trustees and the firms and individuals charged with the management of the trusts.
Trustees do not have accountability to a Trustee Office but to:
- Beneficiaries not beneficially entitled but subject to trustees discretion
- Beneficiaries unborn or yet to be appointed
- Vested beneficiaries (often where they have a current account)
- Inland Revenue Department
- Co – trustees
- Secured external creditors
- Family creditors often the creators /settlors of the trust
I'm excited that Deane will present our 2010 Trusts course in August. The technical course material will require little study, but will be overlaid with a case study and a rich source of practical advice, checklists, templates:
- Suggested engagement, acceptance and other letters
- Sample agreements between trustees, lawyers, settlors, accountants
- Recommended trustees library and valuable references
- Disclaimers and risk management alerts
- Lessons learnt from cases – one liners
- Charts and diagnostic tools
- Trustees file
- Practical tools –all for immediate adoption on return to the office
Findings from last year's Trust course highlighted:
- Professional Indemnity insurers are concerned about the deteriorating standard of administration and management of trusts and estates by professionals.
- The cases heard by the four law courts in New Zealand are revealing seriously inadequate trust /estate administration, management and accounting. An alarming number of trustees, accountants and lawyers are spending time in Court, at hearings or at disputes.
- That matrimonial and relationship breakdowns are inevitably involving trustees, trusts and their advisors.
- The proliferation of accounting /lawyer “trustee companies” not supported by manuals and systems.
- The lack of mandatory (or optional accounting standards)
- The need for comprehensive training in this important aspect of life and business.
- Client ignorance of the consequences of their formation of inter-vivos trusts and the ramifications of creating a testamentary trust by clauses in their wills.
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Look out for TEO's Trust seminar series in August nationwide.
Brent Strong manages TEO Training and welcomes any feedback about this article, courses or anything that will improve your experience with us. Contact TEO Training today
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